ACIT, Ludhiana V. M/s Kular Builders Pvt. Ltd., Ludhiana

ITA 36/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63980 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 12-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: N K SAINI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 36/CHD/2011 ASSESSMENT YEAR : 2006-07 A.C.I.T, CIRCLE V V KULAR BUILDERS PVT LTD LUDHIANA 963/10, ST. NO. 18 KOT MANGAL SINGH LUDHIANA AACCK 0691 C (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SHRI N.K. SAINI DATE OF HEARING 18.09.2012 DATE OF PRONOUNCEMENT 26.09.2012 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-II, LUDHIANA, DATED 10.11.2010. 2. IN THIS APPEAL THE REVENUE HAS RAISED FOLLOWING GROUNDS: 1 THAT THE LD. CIT(A)-II HAS ERRED IN LAW AND ON F ACTS IN DELETING THE ADDITION OF RS. 1,50,000/- MADE BY THE AO BY MAKING DISALLOWANCE ON ACCOUNT OF UNSUBSTANTIAT ED EXPENDITURE INCURRED FOR DIRECTOR REMUNERATION. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING ADDITION OF RS. 4,64,882/- MADE BY THE AO ON ACCOUNT OF SUPPRESSION OF CLOSING STOCK. 3 IN THIS CASE INITIALLY VARIOUS NOTICES WERE SENT BY THE TRIBUNAL THROUGH RPAD BUT NONE APPEARED. ULTIMATEL Y A NOTICE WAS SENT THROUGH THE DEPARTMENT FOR SERVICE ON THE RESPONDENT-ASSESSEE FOR HEARING OF THE APPEAL ON 26 .5.2011. THE REVENUE HAS FILED LETTER DATED 24.5.2011 ALONG WITH ACKNOWLEDGEMENT SHOWING THAT THE NOTICE WAS DULY SE RVED BUT STILL NO APPEARANCE WAS MADE BY THE RESPONDENT-ASSE SSEE. THEREAFTER THE BENCH DID NOT FUNCTION. ONE MORE NO TICE WAS ISSUED THROUGH RPAD TO THE RESPONDENT-ASSESSEE FOR FIXING THE 2 HEARING OF APPEAL ON 13.6.2012. THE REVENUE HAS AG AIN FILED A LETTER DATED 8..6.2012 CONFIRMING THAT THE NOTICE HAS BEEN DULY SERVED ON THE RESPONDENT-ASSESSEE. HOWEVER, THE BE NCH DID NOT FUNCTION ON 13.6.2012. THE CASE WAS AGAINST FI XED ON 18.9.2012 FOR WHICH NOTICE THROUGH RPAD WAS ISSUED AND NONE APPEARED DESPITE THIS NOTICE ALSO. IN THESE CIRCUM STANCES WE PROCEED TO HEAR THE APPEAL ON EX-PARTE BASIS. 4. THE LD. DR FOR THE REVENUE REFERRED TO GROUNDS R AISED BEFORE THE LD. CIT(A) AND POINTED OUT THAT THE ISSU ES ON WHICH THE ADDITIONS HAD BEEN MADE BY THE AO WERE NOT AGI TATED BEFORE THE LD. CIT(A) AND THEREFORE, RELIEF GRANTE D BY THE LD. CIT(A) IS TOTALLY OUT OF CONTEXT. 5. WE HAVE HEARD THE SUBMISSIONS OF LD. DR FOR THE REVENUE CAREFULLY AND THE RELEVANT MATERIAL ON RECORD AND F IND THAT DURING ASSESSMENT PROCEEDINGS THE AO NOTICED THAT T HE ASSESSEE HAD PAID A SUM OF RS. 1,50,000/- AS DIRECT ORS REMUNERATION TO SMT. PARAMJIT KAUR. THE AO ASKED T HE ASSESSEE TO FILE EVIDENCE FOR SERVICES RENDERED BY SMT. PARAMJIT KAUR. SINCE NO SPECIFIC EVIDENCE WAS FILE D, A SUM OF RS. 1,50,000/- WAS ADDED TO THE INCOME OF THE ASSES SEE. SIMILARLY ON EXAMINATION OF DETAILS OF CLOSING STOC K, IT WAS FOUND THAT SINCE THE ASSESSEE IS NOT MAINTAINING ST OCK REGISTER, IT WAS NOT POSSIBLE TO VERIFY THE DETAILS OF THE ST OCK. HOWEVER, IT WAS NOTICED THAT THE ASSESSEE HAD ISSUED LAST BI LL DURING FINANCIAL YEAR TO M/S NAHAR SPINNING MILLS LTD ON 1 8.3.2006 AND SOME PURCHASES ON ACCOUNT OF BAJRI, RORI/SAND ETC, WERE PURCHASED AFTER THIS DATE. THE AO AFTER EXAMINING THE DATE OF LAST BILL NOTED THE DIFFERENCES ON ACCOUNT OF STOC K SHOWN BY THE ASSESSEE AND PURCHASES MADE AFTER THE LAST BILL . THE DIFFERENCE AMOUNTING TO RS. 4,64,882/- WAS ADDED TO THE INCOME OF THE ASSESSEE. 6. BEFORE THE LD. CIT(A) THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1 THAT THE ORDER OF THE ASSESSMENT U/S 143(3) IS B AD IN LAW AND IN GROSS DISREGARD OF THE FACTS OF THE C ASE, IN VIEW OF THE FACT THAT NO OPPORTUNITY WAS GRANTED TO THE ASSESSEES COUNSEL TO ASSAIL THE FINDINGS OF THE HO N'BLE DCIT. ADDITION MADE MERITS TO BE DELETED. 3 2. THAT THE HON'BLE DCIT GROSSLY ERRED IN LAUNCHING THE PENALTY PROCEEDINGS AS NECESSARY SATISFACTION AS TO THE CONCEALMENT OF INCOME OR FURNISHING THE INACCURATE PARTICULARS OF INCOME WHICH IS THE CONDITIONS PRECE DENT FOR LAUNCHING OF PENALTY PROCEEDINGS IS MISSING IN THIS CASE. THAT THE PENALTY PROCEEDINGS LAUNCHED MERIT TO BE STRUCK DOWN. 3. THAT THE HON'BLE DCIT GROSSLY ERRED IN BRUSHING ASIDE THE EARLIER ARGUMENTS ADVANCED KEEPING IN VIE W THE PECULIAR AND SPECIAL CIRCUMSTANCES OF THE CASE. TH US THE ORDER PASSED IS BAD IN LAW AND ADDITION MADE MERITS TO BE DELETED. 7 FROM THE ABOVE IT IS CLEARL THAT THE ASSESSEE HAD NEVER AGITATED THE ADDITIONS MADE BY THE AO. WE FAIL TO U NDERSTAND HOW AND ON WHAT BASIS THE LD. CIT(A) GRANTED RELIEF ON THE ABOVE TWO ADDITIONS. THEREFORE, IN THE INTEREST O F JUSTICE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO RE-EX AMINE THE ISSUE AND GIVE A CLEAR FINDING HOW THE ADDITION HAS BEEN CHALLENGED BY THE ASSESSEE AND HOW RELIEF, IF ANY, IS GRANTED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 26.09.2012 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 26.09. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 4